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from the should-not-embrace-deflation-either dept.
Currently we can observe a general slowdown in the annual growth rate in price inflation across major countries around the world. [...] Most commentators are of the view that deflation generates expectations for a decline in prices. As a result, it is held, consumers are likely to postpone their buying of goods at present since they expect to buy these goods at lower prices in the future. This weakens the overall flow of spending and in turn weakens the economy. Hence, such commentators believe that policies that counter deflation will also counter the economic slump.
Inflation is not about general increases in prices as such, but about the increase in the money supply. [...] For instance, if the money supply increases by 5% and the quantity of goods increases by 10%, prices will fall by 5%. A fall in prices however, cannot conceal the fact that we have inflation of 5% here because of the increase in money supply. The reason why inflation is bad news is not of increases in prices as such, but because of the damage inflation inflicts to the wealth-formation process.
The economic effect of money that was created out of thin air is the same as that of counterfeit money — it impoverishes wealth generators. The money created out of thin air diverts real wealth towards the holders of new money. [...] So, countering a falling growth momentum of the CPI by means of loose monetary policy (i.e., by creating inflation) is bad news for the process of wealth generation and hence for the economy. [...] Furthermore, if a fall in the growth momentum of prices emerges on the back of the collapse of bubble activities in response to a softer monetary growth, then this should be seen as good news. The less non-productive bubble activities the better it is for the wealth generators and hence for the overall pool of real wealth.
https://mises.org/wire/central-banks-shouldnt-fight-deflation
(Score: 3, Insightful) by The Mighty Buzzard on Thursday March 28 2019, @01:34PM (7 children)
Inflation stops the hoarding of wealth by all those rich people you hate so much and forces them to put their money back into the economy as investments. Deflation means investments not likely to produce a higher return than the percentage of deflation over the same time span are literally less attractive than stuffing piles of cash in your mattress. Fucking dumbass.
My rights don't end where your fear begins.
(Score: 3, Touché) by urza9814 on Thursday March 28 2019, @01:42PM
Of course something published by *Mises* would be arguing in favor of anything that lets the rich sit on their goddamn hands and still stay wealthy....
(Score: 4, Insightful) by Bot on Thursday March 28 2019, @02:54PM (3 children)
> forces them to put their money back into the economy as investments
but investments are meant to raise more money than the amount put in. I hear many right and reasonable things in this discussion, but personally i'd go with social credit.
The situation now: usury is cancer. credit is cancer. the issue of money as debt is cancer.
Banks loan money to start activities knowing fully well it will create oversupply, because oversupply makes someone either borrow money (hey that's our business! such luck) or default, and a default means something REAL, not colored pieces of paper or bits in a database, goes under their control. Does not matter whose default it is.
The situation ideally: each year there is availability of X more resources (or less) and Y billable hours. Among that, what is better conserved can be out of the equation, but the rest MUST NOT BE WASTED. So, the state needs to have enough currency for all resources to be consumed. So it prints the currency. And it distributes it according to some method. Taxes should only be devoted to collective services and BTW many of those should not even involve money but direct action from the citizen and their enterprises. A honest government would stand out by the fact that nobody would give a damn about working for state or private project. If state projects are sought after, it's because of kickbacks. If state projects are not sought after, it's because the advantages (in money or tax credits) are too low, so the state is exploiting the citizen. A honest government would also make it possible for people not to work or produce without having fixed cost, because years of decrease are INHERENT in any real world system.
Unfortunately the world has all adopted the usury mindset, so the ideal, which was already difficult to achieve, is even more of an utopia. The problem, it is the only bloodless way out.
Account abandoned.
(Score: 1) by khallow on Friday March 29 2019, @12:55PM (2 children)
Like the fractional banking system? Glad I could help.
(Score: 2) by Bot on Friday March 29 2019, @08:52PM (1 child)
You have a strange mental model of the verb 'distribute'.
Account abandoned.
(Score: 1) by khallow on Saturday March 30 2019, @03:51AM
(Score: 5, Insightful) by ikanreed on Thursday March 28 2019, @03:57PM (1 child)
here's the thing, though. If asset inflation occurs, but income inflation does not, and banks have baked inflation into their loan interest rates, it only helps the hoarders. That's our last 40 years of financial policy.
Good inflation is demand side, the workers of the country get more money, the increased circulation drives goods prices up, and as a consequence debt becomes manageable and the economy grows in a stable fashion.
Bad inflation is like what we've gone since 2007(and to a lesser extent since 1980). Trillions in zero interest loans to banks, the fed buying up existing risky debt to "stabilize" it, investment scours for sources of profit that the new money can go into, inflating things like land, stock, and home values, net economic risk increases dramatically, and you recrash the goddamn economy with no benefit to anyone.
Both are equally inflationary. But the latter destroys lives and achieves nothing.
(Score: 2) by RedGreen on Thursday March 28 2019, @09:34PM
"Both are equally inflationary. But the latter destroys lives and achieves nothing."
That is the goal in all of it they achieve what they wanted, destroying lives to keep the rest as compliant little sheep in step with the party line. Don't want them getting to uppity thinking they have a right to live a decent life.
"I modded down, down, down, and the flames went higher." -- Sven Olsen